The contradiction in the title of the article is potent in it's embodying the broader philosophical and political malaise that we are contending with. The question posed: ‘The free-market: bad for the economy but good for schools?’ is an important one. I wonder, if, the free market where to actually price education - what dollar figure would be determined? To suppose on behalf of some the price would be zero, for others they may bid to the point of bankruptcy. The point is it's a stupid question. The Market(s) for education are mere 'social' constructs with it's abilities and instrumentality determined by government. Private sector education is an indulgence and elitist - with there being no practical reasoning as to why it should exist - other than a bottom line profit driven mentality that permeates all facets of society (hence economy: or is it economy hence society) in this country. Therefore government has to be the sole provider of education in this country, not because current education providers are intrinsically ‘evil’ as some proponents of anti free market philosophies render them, but because education is about society. Education is not about being indoctrinated to become that productive brick-in-the-wall; it’s about crafting academically well rounded, just minded, politically and philosophically aware young people who can contribute to society further to the prevailing system of end point equals retail dollars

Adendum: Karl Polanyi decrees in his seminal work The Great Transformation that there are four markets: money, labour, land, and goods; which he believes only the market of goods to be real. The alternate markets (of money, labour & land) being fictitious constructs which lead to a manipulation of man by other men. I kindly suggest to Kevin Rudd (if he hasn’t) to read The Great Transformation (Polanyi) and The Road to Serfdom by Friedrich Hayek [who in my opinion may I say is grossly misrepresented by the rotting neo-liberal fruit - in the sense that in what the ‘Hayekians’ parlay as his, is no way an adequate or respectful positioning of his philosophies] before boring us with any more essays. The Kevin Rudd essay with its contradictions is crushing to comprehend. As an example he freely berates the neo-liberal orthodoxy (inclusive of the Washington Consensus) and proceeds to espouse the potentiality of World Bank (paart of the same Washington Consensus). May it be extended to you if you are not aware of who is the current president of the World Bank, it’s Robert B Zoellick. You know, the same Robert B Zoellick closely linked with George H W Bush and his predecessor at the World Bank Paul Wolfowitz – those none too shy neo-cons ie neo-liberals. $7.90 for The Monthly. It would have been better flushing that money down the toilet.

It is so interesting that Adam Smith, though father of the free market, was also the one who gave dire warning's how overmuch freedom of competition could let greed overcome need.

Of course, Adam Smith was also a philosopher - thus knowing that though a government must not openly interfere with competition, a government in fact must have leaders who are more conscious and more honest about the above problem than ever.

Certainly that is what has happened to the world economy today, among our government leaders have been just as many racketeers as among the competitive privateers

Just a couple of facts to temper Chris's cry from the heart: funding of private schools had nothing to do with neo-liberalism, unless someone wants to label Gough Whitlam a neo-liberal. Gough was the Prime Minister whose government decided to fund private schools following the findings of the Karmel report; and the vast majority of private schools are neither rich nor elite. They are small Catholic and independently religious primary schools which parents choose in preference to secular government schools. Some might call this a reasonable reflection of our multi-cultural society.

From my perspective, after more than 40 years in school education as teacher, bureaucrat and consultant, the problem is that state governments have not responded to a growing desire for choice. There is too little diversity in government school systems as well as too much bureaucratic interference and insufficient attention to schools where student failure to learn is endemic. Turning around these failing schools is the educational challenge of the age. Like most things, this will require a mix of carrot and stick, support and accountability. So, the only question about the strategies proposed by governments is not whether they are neo-liberal or social democratic in temper but whether they are likely to work. There is plenty of overseas experience on which to draw but sadly, trial and error will be a big part of the process.

Not sure if I agree with Senior Victorian. While Gough Whitlam did boost funding for non-government schools it was at least geared to need. The shift to funding on entitlement – one of the planks of neo-liberalism – came later and helps explain the big financial boost provided by the Howard government. The Rudd government – on the surface – seems unwilling to tackle both the Howard government philosophy as it applies to schools, as well as tackle the lopsided funding deals which accompanied it.

The same philosophy drove government “reforms” in government schools in Victoria and elsewhere – built around the assumption that choice and competition creates improvement in schools. Professor Stephen Lamb’s study of Melbourne (2007) shows that it delivered little more than substantial social class division between schools.

Surely Senior Victorian can see that the legacy of this lingers strongly in Victoria. Even this week an audit report found that gaps between advantaged and disadvantaged kids have not narrowed and problems increase towards the senior years. This is hardly surprising in a “choice” system which entices engaged kids into middle class schools and concentrates disadvantaged kids together.

Fixing this is, in Senior Victorian’s words, “the educational challenge of the age”

Just a couple of points. Gough Whitlam didn't start funding of private schools, Robert Menzies did.

And there is nothing especially neo or otherwise about allocating funds according to the Howard formula. It's just a way of calculating need. Private schools have been funded on the basis of need for at least the last 30 years, but the method of calculating that was opaque. Howard came up with a transparent method. As it gives more money to those who have less it's more a welfare measure than a market one!